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Lanka Facing Debt Crisis

Sri Lanka is headed for a debt crisis, the finance ministry warned Sunday, blaming a series of costly projects commissioned by the previous government for record-high repayments, AFP reported. Finance Minister Mangala Samaraweera said payments of capital and interest would reach $2.84 billion this year, mostly to repay loans for extravagant projects under former president Mahinda Rajapakse. "The crisis will further worsen next year," Samaraweera said in a statement, adding repayments are expected to soar to $4.28 in 2019. "Repayments will go to pay the debts that were obtained during the Rajapakse regime for the waste, fraud and corruption committed by the oligarchies of the Rajapakses," he added. Foreign reserves totaled $9.9 billion at the end of April, the central bank says. Samaraweera said Rajapakse's administration secured two high-interest loans worth $1.5 billion in the final year of its decade-long rule. Officials say Rajapakse relied heavily on China to finance his grand infrastructure projects but many ended up becoming a burden on Sri Lanka's $87 billion economy.